Economy

George Osborne beat the expectations game today. His abolition of the fuel duty escalator for this parliament should — Elizabeth Taylor and Libya permitting — get him the front pages he wants.   Aside from the headline measures, I think there are three stories that will run on from this Budget. First, the government is accepting the Hutton report’s recommendations on public sector pensions in full. This puts the ball firmly back in the unions court, who had previously accused the government of trying to cherry pick from it. Second, the requirement that all planning decisions will have to be reached within one year will have a big impact. A huge number of projects get held up in the planning system for years, so this is a welcome move.

There was a time when  "http://blogs.wsj.com/iainmartin/2010/04/30/alistair-darling-labours-caretaker-leader-in-waiting/">commentators on the right thought that Alistair Darling may become Labour leader, such was the respect he commanded. Alone among Brown’s Cabinet, Darling rose above the ideological opportunism and infighting to emerge with his reputation enhanced. Darling is ready to tell of his part in New Labour’s downfall. This morning’s Independent "http://www.independent.co.uk/news/people/profiles/alistair-darling-we-were-two-hours-from-the-cashpoints-running-dry-2245350.html">previews the book by interviewing the former chancellor.

Benedict Brogan's latest post is built around an observation from Jo Johnson on the 50p rate, yet it is Brogan's own observation that gets a place in our Budget scrapbook: "Some people I have spoken to think George Osborne might be sufficiently worried about the growing exodus of entrepreneurs to put down a marker on 50p in the Budget next week." Whether this "marker" transpires — and what it might look like, if it does — is something we shall have to wait for. In the meantime, it's worth noting that Labour have already set a marker on 50p: that it will have to remain for the duration of this parliament, at least. There is a clear opportunity for Osborne to define himself, and the coalition, against that.

Last November, the OECD forecast — as it does — that the UK economy would grow by 1.7 per cent in 2011. Today, it has downgraded that figure to 1.5 per cent. I wonder, does this matter? Sure, it's not an encouraging sign. And Ed Balls will be slathering at the thought of the OBR doing likewise next week. He has barely been able to contain his excitement already. Yet it's worth pointing out two things. First, that the OECD is just one forecaster among many. The Treasury monitors no less than 39 independent organisations, and collects their forecasts on a monthly basis. Here's what the picture looks like today: Which is to say, the average growth forecast for this year is unchanged at 1.8 per cent. For next year, it is 2.1 per cent.

The mood in Dublin is febrile, despite the gloom of 14 percent unemployment. Everyone has advice for Enda Kenny on how to revive the Celtic Tiger. This morning, 17 prominent businessmen and public figures submitted A Blueprint for Ireland’s Recovery to the Department of the Taoiseach. The Irish Times reports that the authors propose deeper spending cuts and greater efficiency in the public sector. This is a different approach from influential Irish Economist Colm McCarthy, who argued on Sunday that ‘fiscal stringency is not enough to resolve the crisis’ because the banking restructure (contained within the IMF/EU bailout) is ‘impractical'. Enda Kenny, it seems, agrees with McCarthy, which is why he went to Brussels last week to renegotiate the 5.

One of the hardest tasks of any opposition is to gain the trust and credibility to run the economy. After what happened over the last few years, Labour have an enormous credibility gap. Ed Balls’ decision to oppose any measure to deal with the deficit has reduced Labour’s economic credibility still further. So too has the two Eds’ decision to make attacks based on mis-truths, like denying there was a structural deficit before the election; or attacking the coalition for cutting bank taxes, when it is actually putting them up; and like backing another bonus tax, despite opposing it at the election, and despite Alistair Darling’s careful explanation of why it won’t work.

George Osborne’s speech to the Tory spring conference today showed the classic left-right way in which he wants to frame the political debate about the economy ahead of the Budget on the 23rd of March.  In a move straight out of the election-winning centre-right playbook of the 80s, he attacked Balls and Miliband as “Two left-wing politicians who don't understand anyone who wants to get up and get on, anyone who want a better life for their family, anyone who want to create wealth, and start a business, and create jobs, and leave something to their children.